A declared aim by the Hungarian Export Promotion Agency (HEPA) is to be a reliable and active partner for Hungarian SMEs in the field of export development, contributing to domestic export success. The CEO of the organization, Dr. Kristóf Szabó explains to Diplomacy&Trade how they wish to achieve this goal and make selected firms ‘export-ready’.
“Throughout the years, we have developed an extensive service portfolio, free of charge, that can help Hungarian companies in various fields, let them be at any stage of export maturity. For those of early export maturity, we offer international trade trainings through our so-called Export Academy, with a wide range of topics of, for example, logistics, marketing, intercultural business conduct, legal, transactional risk management or finance,” the CEO highlights.
HEPA can also provide foreign market information through tailor-made market research, for instance, which greatly helps companies to reduce the risk and cost of entering foreign markets. “In order to define the export-readiness of any given company, we offer our personal advisory/consultancy services for those interested in enhancing their positions in the export markets. Also, if the ideal potential customer is well-defined for us during the export consultancy occasions, based on that profile, we conduct international partner searches, with the desired outcome being new business opportunities for our partners.
Additionally, we put great efforts on export promotion, meaning that we organize business forums, B2B events, international exhibitions, conferences and all the related programs for outbound and incoming business delegations,” he adds.
Non-refundable subsidy programs
One other tool that HEPA uses to facilitate domestic export successes of SMEs is the ongoing non-refundable subsidy programs. In response to either constant or instant needs emerging also from the SME sector, HEPA has launched different funding schemes over the past years. The main goal of the External Market Access Support was to aid countering the damages caused by the COVID-19 pandemic in terms of foreign market activities of Hungarian companies. The Brexit Adjustment Reserve was designed to help offset the negative effects of Brexit experienced by Hungarian firms. The External Market Growth Support and its successor scheme, the External Market Growth Support Program, are aiming to provide larger scale financial assistance to Hungarian companies willing to invest in foreign markets, while the Western Balkans Investment Scheme intends to realize the same goal specifically in the Western Balkan countries.
In addition to the above, HEPA currently has one funding program open that is focusing on providing non-refundable financial assistance to Hungarian firms intending to invest in export markets. The subsidy granted in the External Market Growth Support Program (EMGSP) can be used to implement a foreign investment, to expand an existing foreign enterprise or to acquire and develop a company otherwise destined for closure. The amount of the grant is between HUF 500 million and 4 billion, from which the program provides up to 50% financing of the total project cost. If meeting the eligibility criteria set by the respective ministerial decree, the EMGSP is open to SMEs as well as to large enterprises. All industries not excluded by the applicable EU legislation are eligible for the subsidy, however, investments in sectors defined by the Hungarian National Export Strategy will be given priority, such as health, food and construction economy, water management and environmental sustainability, creative industry, accommodation development and digitalization. The main project indicator the supported companies must undertake is that the revenue growth of the Hungarian parent company from the activities carried out within the framework of the project reaches at least 100% of the awarded support during a maximum period of ten years of compulsory maintenance of the business activity abroad.
Helping from the beginning
Preparing a Hungarian company for being successful on export markets is just the first phase of the job. Dr. Kristóf Szabó explains that a beginner-phase exporter can easily make some unintentional mistakes, which, in the end, might result even in business loss to a certain extent. Such problems can be the lack of qualified and experienced sales personnel within the company apart from the managing director, the lack of good-quality marketing materials in the language of the target country, the lack of respective product permits or quality assurance systems, the lack of production capacities, the lack of a clear export strategy prioritizing the target markets and the reluctancy of bearing the costs of market entry.
“The good news is that all the techniques and information necessary for tackle such issues are provided during our export academy programs and export consultancy services,” he points out.
Stakeholders of small and medium sized enterprises, who consider expanding their business activities toward a foreign market, faces several unforeseen difficulties. “We realized that there is a market gap in export related online and offline programs for those who intend to become professionals in short time in that field or would like to update their knowledge. Therefore, we launched a complex e-learning program, ‘Basics of export’ in January 2022. The main purpose of the program is to draw attention of the Hungarian SMEs to the growth and innovation opportunities of the foreign markets, through introducing potential benefits given by international business activities. The other purpose is to contribute to the increasing number of domestic export professionals through providing up-to-date, practical knowledge in that field,” the CEO says.
In almost 100 hours, HEPA provides e-learning and video lectures introducing the basics of export, international marketing and branding, international trade contracts and transactions, intercultural knowledge, finance and risk management. “We are aware that mastering comprehensive knowledge doesn’t happen overnight, it takes time. Therefore, we didn’t set up any time limitation, everyone who enrolls the course, proceeds according to their own free time. Videos can be watched during a coffee break or on their way to work. We believe, this leads to a more effective learning experience and on a long term to hopefully better business decisions,” he adds.
Enrolling this course, which is free of charge, is a great opportunity for everyone who is looking for an introductory course in the field of export. This year, HEPA is also planning to launch a more profound training, which will prepare attendees to oversee international trading and export activities in a complex way.
Population-wise, Hungary is ranked 95th among all the countries of the world, however, the country’s export performance, which resulted a EUR 119 billion record-height export turnover in 2021 puts it into the 34th position globally. “So, it is safe to say that the existence of a professional export supporting institution under the governance of the Ministry of Foreign Affairs and Trade is not a ‘nice-to-have’, but a ‘must’ if we would like to keep and enhance our respective global positions. The vast majority of the companies seeking for HEPA’s support are indeed from the SME sector,” the HEPA CEO points out.
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